Guest Feature: USA Implications of a Trump Administration for the Healthcare Sector European Union VAT on blood plasma supplies The European Court of Justice reiterates that parallel importers of medical devices are not required to carry out a further assessment to certify the conformity of the information BelgiumBelgian Competition Authority raids several companies active in the sector of wholesale distribution of pharmaceutical and para-pharmaceuticals products to pharmacies Italy The Senate approves the provisions of the 2017 Budget Law on the purchase of biotech medicines Drugs for compassionate use The AIFA publishes the final budgets for the 2016 pharmaceutical and hospital expenditure The Court of Cassation confirms the public nature of the Provincial Health Authorities ("ASP") Kingdom of Saudi Arabia Highlights New regulations and consultations
Turkey Introduces Strict Requirements on Personal Health Data Processing Ukraine The Long-Awaited New Licensing Conditions on Turnover of Pharmaceuticals Become Effective United Arab Emirates Scientific offices: New Ministerial Decree United Kingdom Accelerated Access Review publishes Final Report into innovative medicines and medical technologies
If you have any suggestions about the format or content of the newsletter please contact the acting editors Michelle Bawn, Julia Gillert and Els Janssens. To add or remove subscribers, please email Lisa Kaddouri.
Welcome to the January 2017 edition of our newsletter. The EMEA Healthcare Industry Group Newsletter is your monthly digest of legal developments affecting the life science and healthcare industries across the continent.
T: +41443841450E: firstname.lastname@example.org We are delighted to advise you that Christoph Wild joined our EMEA Healthcare Industry Group towards the end of last year. Christoph is based in our Zurich office and will play a key role in strengthening our healthcare and life sciences offering. Christoph joins us from Wenger & Plattner, where he headed their Healthcare and Life Sciences practice. He was previously at Novartis for many years and therefore brings an in-house perspective and understanding of the trends and needs of businesses operating within the sector. Christoph’s practice focuses on advising local and international healthcare and life sciences companies on major transactions (i.e., licensing and cooperation agreements, joint ventures, mergers and acquisitions) and advising on industry-specific regulatory matters. He also specializes in regulatory and criminal investigations, as well as advising on compliance matters.Guest Feature: USA Implications of a Trump Administration for the Healthcare Sector President-elect Donald Trump has variously proposed plans for healthcare policy reform aimed at (i) repealing Obamacare, (ii) enhancing private insurance competitiveness by national control of insurance that will provide heath insurance coverage and affordability; and (iii) controlling drug prices. Trump has a strong mandate to negotiate a solution with Congress; first because of his strong showing among middle class voters and second because of his unexpected "coat-tails" that saved Republican seats in the Senate. He is also not tied to the conservative or "Tea Party" side of the Republican party and thus, has the potential opportunity to reach across the aisle to achieve compromise solutions. He has a strong position to implement healthcare plans through both executive and Congressional action. In short, while drug companies are producing remarkable innovations, such as cures for hepatitis C and drugs that enlist the immune system to combat cancers, the healthcare sector faces an uncertain but potentially significant change in cost-containment pressures. This memo describes Trump’s key healthcare proposals. U.S. healthcare The U.S. healthcare system is unique in its size (~16.5 percent of GDP, versus an OECD average of nine percent) and its structure. While governments around the world play the central role in healthcare, the U.S. system is highly segmented, with private insurers playing an important role. Traditionally, U.S. government programs provide for the poor (Medicaid), veterans (Veterans Affairs) and the elderly (Medicare). The majority of Americans outside government programs obtain (tax-favored) private insurance through their employers. Providers negotiate with insurers, producing a wide diversity in prices and coverage. This approach has produced the world’s most expensive healthcare system, but also the most innovative and successful for patients with coverage, with spillover benefits for patients around the world. The Affordable Care Act (Obamacare), passed in 2010, expanded healthcare to previously uninsured Americans. That law (i) mandated that all Americans obtain insurance, (ii) created state-based exchanges where individuals could purchase policies whose coverage was regulated, (iii) made changes that impaired Medicare profitability for providers, and (iv) provided subsidies for moderate income Americans. Additionally, during passage of Medicare drug coverage (Part D), the Center for Medicare and Medicaid Services (CMS) was barred from negotiating drug prices. Over the past two years, consumers and providers in all sectors have complained about rising premiums, shrinking coverage, and drug costs. Insurance Trump has argued for abandoning the mandate for insurance as well as state regulation of health insurance companies which would increase competitiveness. He has also promised to expand insurance coverage and affordability in part based on increased competitiveness among insurance companies. If the move to federal regulation of health insurance does not achieve increased coverage and affordability, given his mandate and his failure to commit to “no new taxes,” we see a potential for eventual increased federal funding of private health insurance through patient vouchers or other means of patient support. Medicines Trump’s campaign promises also include constraining prices for innovative and generic drugs. Negotiated Prices for Innovator Medicines His ideas for reducing the cost of drugs include a number of items previously proposed by Democratic officials, including:
- Importation - Trump has stated support for a proposal that Americans should be allowed to import drugs for personal use from foreign nations whose safety standards are as strong as those in the United States.
- Medicare price negotiations - Trump has called for a special session of Congress to repeal Obamacare (although Congress initiates the session before the President is inaugurated). As part of the anticipated repeal of Obamacare and/or changes to other aspects of health insurance, the current restraint on federal negotiation of drug prices could be removed. In the past, the Center for Medicare and Medicaid Services (CMS) has used negotiations with providers to reduce and control hospital reimbursement (Part A) and physician fees (Part B). Given the freedom to do so, there is a potential that CMS also attempts to negotiate drug prices (Part D). Given his lack of specifics, his coat-tails, lack of ties to conservative elements of the Republican Party, historically more liberal positions, and a base that includes more liberal blue collar workers, he likely has freedom to institute any plan, including price negotiations.
- Article 8(1), under which Member States which have found that there are health or safety risks linked to medical devices to take all appropriate interim measures to withdraw those medical devices from the market, or to prohibit or restrict them being placed on the market or put into service, with a subsequent examination of the Commission of the interim measures;
- Article 10, that requires Member States to take the necessary steps to ensure that any information brought to their knowledge regarding incidents involving a Class I, IIa, IIb or III device, as well as any inadequacy in the labelling or the instructions is recorded and evaluated to ensure that they immediately inform the Commission of measures that have been taken or are contemplated in order to minimise the recurrence of those incidents.
- Article 14. b), according to which, in order to ensure protection of health and safety of patients, the availability of such products should be prohibited, restricted or made subject to particular requirements by Member States, among other measures.
Belgium Belgian Competition Authority raids several companies active in the sector of wholesale distribution of pharmaceutical and para-pharmaceuticals products to pharmacies On November 21, 2016, the Belgian Competition Authority ("BCA") conducted surprise inspections at the premises of a number of pharmaceutical wholesalers, including Belmedis, Pharma Belgium and Febelco. The BCA has indicated that it has information about allegedly anticompetitive agreements between several players active in the wholesale distribution of pharmaceutical and para-pharmaceutical products to pharmacies in Belgium. Mrs V. Thirion, the Auditor General at the BCA, has stated that the BCA considers this a "very serious" case based on the allegation that market players agreed on prices and discounts, and allocated markets amongst each other. These practices mainly concern the prices of non-regulated medicines, which are available without prescription. It is worth noting that these alleged infringements came to light in the context of a market investigation launched by the BCA as part of the merger control review of the intended acquisition of Belmedis by Pharma Belgium (Celesio Group), which was notified to the BCA on October 25, 2016. The BCA has indicated that, due to restricted manpower, it has currently only raided three out of the five major players active on the pharmaceuticals wholesale distribution market. Until today, it is unclear whether other players such as SERP and Lifé are also involved in the investigation. For more information, please contact Vincent Mussche from our Belgium office.
Italy The Senate approves the provisions of the 2017 Budget Law on the purchase of biotech medicines This past December 7, the Senate approved the 2017 Budget Law which includes several provisions governing the purchase of biotech medicines. Among the various provisions, the most relevant are those:
- Confirming the EMA and AIFA's competence in assessing the therapeutic equivalence between originators and biosimilars;
- Excluding the automatic substitutability between originator and biosimilar as well as between different versions of the same biosimilar; and
- Prohibiting the competition, in the same lot for the award of public tenders, between biosimilar drugs having different active ingredients although intended for the same therapeutic use.
Kingdom of Saudi Arabia (KSA) Highlights Healthcare has long been a focal point of investments in Saudi Arabia, both from the government and the private sector. In early 2016, and as part of a government plan to limit dependency on oil, the deputy crown prince announced the Saudi Vision 2030 plan, of which healthcare is a key pillar. The executive branches of healthcare include the Saudi Food and Drug Authority ("SFDA") and the Ministry of Health ("MoH"). These two are supported by the Ministry of Municipal and Rural Affairs' Health Inspection Department, which is tasked mainly with inspecting the quality and compliance of food and healthcare service provider outlets. The SFDA recently reported on a number of inspection findings, including the confiscation and proper disposal of counterfeit medical and pharmaceutical products, pharmaceuticals held in improper storage conditions, and pharmaceuticals sold without proper licensing at local mom-and-pop herbal stores. Notable efforts have been introduced in healthcare inspection measures, including the establishment of a compliance unit within the MoH. The Ministry's new compliance unit, which includes a number of active ministerial review and investigation committees, is tasked with inviting more scrutiny and reporting on healthcare expenditure in a bid to maximize the government's purchasing efficiency. One recent widely-circulated report (January 11th, 2017) presented findings on a SAR 20-million (~ $5.3 M) purchase order for immune deficiency syndrome (HIV/AIDS) treatments which went unused. Another notable action of the compliance unit was the shut down of 908 non-compliant health care facilities, including some MoH hospitals and primary care providers. Trial efforts to increase the private sector's contribution to healthcare costs have also taken place, including the shut down of a number of MoH pharmacies and referral of patients with MoH prescriptions to private pharmacy chains. The MoH also recently announced (January 14th, 2017) that it had signed an agreement with the Public Prosecution Bureau to criminally prosecute medical malpractice and the unlawful practice of the medical profession (including those with falsified qualifications and with no proper license(s)). New regulations and consultations 1. The SFDA has issued the following regulatory instruments:
- A final updated version of the Saudi Drug Code and Drug Barcoding Specifications (November 20, 2016)
- A final version of Reference Guide on Importation Requirements for Non-Medical In-Vitro Diagnostics in both Arabic and English. (November 28, 2016)
- A circular, clarifying that drugs of the same active ingredients but with and different concentrations, may be presented in a single Baseline application folder to the SFDA for approvals (December [x], 2016)
- A final version of A Guidance Note for Healthcare Providers on Storage, Handling and Transportation of Medical Devices (December 29, 2016)
- A final version of a Guidance Note on Medical Devices Intended for Demonstration or Training Purposes Only (January 5, 2017)
- The Regulatory Framework for Drug Promotion and Advertising (published on November 29, 2016 for a 90 days consultation)
Turkey Turkey Revises Guidelines for users and sellers of cosmetic products Recent development The Turkish Medicines and Medical Devices Agency ("TİTCK") published on its website the Guidelines for Users and Sellers of Cosmetic Products Version 2.0 (the “Guidelines Version 2.0,” tr. Kozmetik Ürün Kullananlar ve Satışını Yapanlar İçin Bilgilendirme Kılavuzu Sürüm 2.0), based on the Cosmetics Law and the Cosmetics Regulation. What’s new? The new version of the guidelines introduces definition of the terms “gluten-free cosmetic products,” “vegan cosmetic products,” and “manufacturer,” as well as increasing manufacturer obligations. According to the Guidelines Version 2.0:
- A notification requirement has been introduced in relation to any serious adverse effects arising from a cosmetic product during a professional cosmetic application. It is now also required to keep a record regarding the content of all materials and mixtures used during professional cosmetic applications, the methods of usage of cosmetic materials, mixtures and products, along with the precautions to be taken following such applications.
- Certain information should now be provided on the websites where cosmetic products are advertised; including the name, trademark and functions of the advertised product, along with the intended purpose and methods of usage located on the external and inner packaging of the product. Additionally, trade names and contact details of the manufacturers of products which are produced by multiple manufacturers should be provided on the same page with the product information.
- A detailed list of precautions has been introduced in order to maintain the quality and safety of cosmetic products, such as protection of products from direct sunlight or shaking the products that are in liquid and emulsion forms.
- Artificial nails, tooth piercings, room air fresheners and sprays have been added to the list of the products that do not fall under the scope of the Guidelines.
- Ensure that the technical staff recruited by cosmetics companies have sufficient experience and good command of cosmetics legislation and user guides provided on the the EBS and the ÜTS and that they are qualified to conduct the necessary technical actions.
- Direct technical problems on EBS and ÜTS, password renewal requests, problems regarding export certificates for cosmetic products and information requests on legislation and legal obligations regarding cosmetic products, to the relevant email addresses listed by TİTCK.
- Use either Google Chrome or Mozilla Firefox while proceeding on the ÜTS and EBS.
Ukraine The Long-Awaited New Licensing Conditions on Turnover of Pharmaceuticals Become Effective Recent developments On November 30, 2016, the Licensing Conditions for Conducting Business Activities on Manufacturing, Wholesale and Retail Trade in Pharmaceuticals, Import of Pharmaceuticals (save for active pharmaceutical ingredients) (the "Licensing Conditions") were approved by Regulation No. 929 of the Cabinet of Ministers of Ukraine (the "CMU"). The licensees should promptly bring their activities in compliance with the new Licensing Conditions. Implications for licensees The Licensing Conditions consolidated requirements to all types of economic activities connected with pharmaceuticals, specifically: import, manufacture, wholesale and retail trade. These requirements impose additional obligations for licensees compared to the previous licensing conditions approved by the orders of the Ministry of Health of Ukraine (the "MOH") No. 723 dated October 31, 2011 (manufacture, wholesale and retail trade of pharmaceuticals) and No. 143 dated February 20, 2013 (import of pharmaceuticals). Furthermore, the Licensing Conditions postpone certain obligations for importers until March 1, 2018. Pursuant to the previous import licensing conditions, the latter obligations formally became effective on March 1, 2016, but could not technically be implemented by importers. As a result, the licensing authority, i.e. the State Service of Ukraine on Pharmaceuticals and Control of Narcotics (the "State Pharmaceuticals Service") announced that that it would not verify licensees' compliance with the above-mentioned provisions during licensing audits. The Licensing Conditions became effective on December 20, 2016, except for certain requirements applicable to importers, which become effective on March 1, 2018. The licensees should bring their activities in compliance with the requirements of the Licensing Conditions within two months after their effective date, i.e., by February 20, 2017, except for the obligation of the pharmacies to ensure accessibility of premises for the disabled pursuant to the state construction regulations, rules and standards by December 20, 2017. What the regulation says The most important changes for licensees are summarized below. Manufacture
- Introduction of the manufacturer's obligation to conduct qualification of raw materials' suppliers and document its results;
- Introduction of the manufacturer's obligation to maintain protocols regarding the supply chain and its traceability for each active ingredient;
- Introduction of the manufacturer's obligation to conduct an audit of active ingredients' manufacturers and distributors regarding compliance with the GMP and GDP requirements;
- Introduction of detailed requirements to the outsourcing activities, including contract manufacturing, in particular: (i) specific requirements to the contracts; (ii) requirement to store the protocols of manufacture, analysis and distribution; and (iii) requirement to store the reference samples; and
- Introduction of more detailed requirements to the procedure for recalling pharmaceuticals and manufacturers' self-inspections.
- Introduction of more detailed requirements to the quality system of the wholesaler;
- Introduction of the wholesaler's obligation to conduct self-inspections;
- Elimination of the requirements for the minimum stock of pharmaceuticals to be maintained by the wholesaler; and
- Introduction of the wholesaler's obligation to conduct qualification and approval of suppliers prior to any procurement, as well as to verify the supplier's compliance with the GDP requirements.
- Introduction of the prohibition to place pharmacies in any objects except those the property rights to which are subject to state registration (thus, the pharmacies cannot be placed in small architectural forms);
- Introduction of the pharmacy's obligation to ensure by December 20, 2017 accessibility of premises for the disabled pursuant to the state construction regulations, rules and standards;
- Introduction of more detailed requirements for the storage of pharmaceuticals not owned by a pharmacy;
- Cancellation of the pharmacy's obligation to get approval of its operating hours from the local executive or self-government authorities (except for communal and state pharmacies); and
- Prohibition to use the name and/or trademark on the outdoor signs if the name and/or the trademark contains reference to the following:
- level of prices or other pricing characteristics that can influence consumers' intentions regarding buying goods in that pharmacy;
- misleading information regarding the pharmacy's focus on providing services to certain social groups; and
- comparison with other pharmacies.
- Postponement of certain requirements for importers until March 1, 2018, including the following requirements:
- entering into agreements by the importer with the marketing authorization holder, and/or the manufacturer, and/or the supplier of pharmaceuticals;
- introduction of the pharmaceutical quality system;
- stability testing after introducing the pharmaceutical into turnover;
- outsourcing agreements related to the import of pharmaceuticals; and
- storage of reference and archive samples of pharmaceuticals by the importer; and
- Specification of documents' content regarding traceability of products that should be stored by the importer.
United Arab Emirates (UAE) Scientific offices: New Ministerial Decree On October 24, 2016, the UAE Minister of Health has signed into law a Resolution concerning scientific offices (Ministerial Resolution No 1110 of 2016 - the "Resolution"). The Resolution is part of a move by the Ministry of Health (“MOH”) to further clarify and strengthen the rules regarding scientific offices. Article 1 of the Resolution confirms the obligation that a scientific office license must be obtained from the Ministry of Health prior to setting up a scientific office in the UAE. Such obligation is not new. In fact, it reiterates the obligation which was already included in Federal Law No (4) of 1983 concerning the profession of pharmacy and pharmaceutical institutions. However, in the past, it was not very clear what was considered a scientific office and in which circumstances a scientific office license was required. In the absence of a clear legal basis the Ministry of Health therefore strongly encouraged companies (and particularly foreign manufacturers of medicines) to set up a scientific office in the UAE but did not enforce this as an obligation. The significant change introduced by the Resolution is the list of activities which are considered scientific office activities: The list laid down in article 12 of the Resolution includes 14 different activities ranging from the follow up on importing and exporting of medical products to medical information, regulatory affairs and pharmacovigilance. Any entity which engages in such activities needs to obtain a scientific office license from the MOH before doing so. In practice such license can be obtained either by the local entity of a foreign manufacturer or its local agent in case the agent takes care of such activities on behalf of the manufacturer. As many local entities of foreign manufacturers are established in free zones in Dubai, it is important to note that the option of obtaining a scientific office license is available in some but not all free zones. Furthermore, the Resolution sets forth the health and technical conditions that must be met in relation to the premises of a scientific office as well as staffing requirements (e.g. the obligation of having a licensed pharmacist as a technical manager in charge of the scientific office) and other requirements (e.g. the obligation that the applicant must be a UAE national and a representative of one or more manufacturers of medical products (medicines and medical devices) registered in the UAE). The prior registration as (representative of) a foreign manufacturer will not, however, be required in case the products are imported in the UAE for the sole purpose of storage and re-export). The Resolution also offers further detail on the application and licensing process. The process consists of an initial and final Ministry of Health approval subject to inspection with a maximum of six months in between to allow for all technical and other requirements to be fulfilled. The scientific office cannot engage in any scientific office activities until the final scientific office license is obtained. The Resolution did not yet come into effect. It will come into effect the day following its publication in the Official Gazette which yet need to happen. For more information please contact Els Janssens of our Abu Dhabi office.
Accelerated Access Review publishes Final Report into innovative medicines and medical technologies Background In November 2014, the UK Government asked Sir Hugh Taylor to chair a review into how to speed up access to innovative medicines, medical technologies, diagnostics and digital products to NHS patients. It has been widely recognized for some time that accessing innovative products in the NHS has become increasingly challenging, creating frustrations for patients, clinicians and industry alike. Recommendations The Accelerated Access Review's Final Report (the "Report") was published on October 24, 2016. The Report identifies opportunities for acceleration at every stage of approval and adoption of medicines and medical technologies. It aims to increase innovation throughout the NHS for the benefit of patients, and improve the UK's international competitiveness. Its key recommendations include:
- The NHS should develop an enhanced horizon scanning process, so that all emerging products are considered consistently and thoroughly.
- An Accelerated Access Pathway should be established, enabling strategically important, innovative products to achieve market access as quickly as possible.
- There should be a single set of clear national and local commissioning arrangements to get medical technologies, diagnostics, pharmaceuticals and digital products to patients.
- The National Institute for Health and Care Excellence ("NICE") should review its assessment processes and methods to ensure these can adequately assess important new types of emerging products.
- A package of coordinated incentives should be implemented to encourage local uptake of innovation.
- An Accelerated Access Partnership, established immediately, should align key national bodies around the principle of accelerating innovation.
- The NHS will achieve a more cost-effective, informed and dynamic system for bringing important innovations into the UK health system.
- Patients will benefit from a more streamlined system that reduces the time taken to receive innovative treatments.
- Innovators will gain from a new approach to speeding up reimbursement and adoption.